Write hardware consolidation into purchase contracts

Losing one of the remaining four large server vendors in a HP-Compaq styled merger could adversely impact current competitive pricing, Gartner has said.

In one of the opening sessions to the 2008 Symposium ITxpo in Sydney, Gartner managing VP, Matthew Boon, warned delegates to prepare for consolidation in their IT equipment purchase plans as it may not be all good news for customers.

“If we think we’ve got four core global server vendors then we’re best served if we can retain all four,” said Boon.

“If we lost another major vendor, then the market place might get a little bit less competitive.”

Boon foreshadowed a potential consolidation of the broad product portfolios that many of the larger hardware players have built up via acquisition.

“Hardware vendors have gone through a period of broadening portfolios to offer greater choice and competition in the market place,” explained Boon.

“I think if a slowdown hits it will be very difficult for vendors to sustain these broad portfolios. I expect there will be consolidation amongst vendors and their product lines and offerings as well.”

Boon urged customers to get hold of a vendor’s long-term product roadmap before buying more equipment in the current environment - and to write ongoing support into the purchasing contract to ensure continuity of service levels and support even if they were to be acquired.

“I think its prudent right now to take the potential for vendor consolidation into account within contracts,” explained Boon.

Outside of consolidation, roadmaps are becoming increasingly important as the lion’s share of vendor revenues starts to come from emerging markets. This will likely shape their future product development plans, according to Boon.

“Be aware of how the vendor’s product development strategy is shifting as they seek to service those markets,” he said.

“Emerging markets are deploying IT as we were 5-10 years ago, so you need to make sure you’re still getting the right level of focus as the importance of these markets starts to shift.”